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Packer's Crown Casino To Undergo Restructure

Tuesday 14 February, 2012 16:03

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James Packer's Crown Casino is undergoing a restructuring and modernization of its management system that will see hundreds of management positions removed. The changes come due to increased competition from Sydney's Star Casino and from Singapore.

The plan for improved efficiency is being directed at the table games division of the casino and up to 300 managers in the division are expected to be affected. Those affected will include casino supervisors, operational managers and pit bosses. However, the majority of affected managers are expected to be offered new posts within the casino. The more than 1,000 dealers in the division will not be affected.

Australia's share of gaming revenue from South-East Asia has fallen from 30 percent to 9 percent over the last five years, and this can largely be attributed to increased competition from Singapore and Macau. The overhaul of management systems in the Melbourne casino are part of a bigger $2 billion refurbishment plan for the Perth and Melbourne casinos.

Allens Consulting recently released a report which indicated that International VIP players spent $739 million in 2007 to 2008 on visits to Australia. The expenditure related to these players was estimated to increase Gross Domestic Product by $84 million and it was reported that this could lead to an increase of $1.8 billion in Australian private consumption over ten years.

Shares Have Been Volatile Over Past Year

Shares in the company have been volatile over the past year due to talk of the introduction of mandatory pre-commitment technology and how that would affect the casino's revenue. Crown Casino shares have gone from as low as $7.45 to as high as $9.20. Mandatory pre-commitment would require gamblers to pre-set a limit for betting that would deny them access to poker machines once they reach the limit.

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Poker machines generate a yearly income of $12 billion and Clubs Australia has estimated that mandatory pre-commitment would cost the industry up to $5 billion. Analysts have estimated that revenue for Crown Casino will be affected by $36 million to $145 million, depending on the level of the requirements.

The industry was relieved when last month the Gillard government announced that it would run a trial of the pre-commitment technology before it committed to any changes in legislation.

Introduction of the system will not be implemented until after the next election and the industry is hoping this means the end of the issue. Times remain challenging for the gaming industry in Australia, with much uncertainty regarding regulations.

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